This is a neutral and more grammatically correct version of the language. Its use is mostly limited to the written medium, but is also used for verbal communication in news channels and academic contexts.
>neutral and more grammatically correct version of the language
is nuts. Arabic isn’t a language any more than the Romance languages are. Moroccan, Egyptian and Yemeni Arabic are at least as divergent as Spanish, French and Romanian. FuSha is like if the entire Romance speaking world wrote in Latin.
The academic contexts FuSha is used in are also limited to primary and secondary instruction, Arabic language and religion mostly. Tertiary education across the Arab world is often conducted in English or French so the educated classes will speak at least one of those languages at a near native level. That’s part of why there are fewer books translated into Arabic each year than into Dutch.